- Enanta Pharmaceuticals was double-digits in the red Thursday morning following the release of data that, while technically positive, didn't convince shareholders the company can compete in the growing NASH field.
- NASH, shorthand for non-alcoholic steatohepatitis, is a fatty liver disease that Wall Street analysts view as a multi-billion dollar market opportunity. An Enanta drug called EDP-305 is under investigation as a potential treatment, and just notched Phase 2a data showing that patients who took the drug, as opposed to placebo, had reduced levels of an enzyme indicative of liver problems.
- Those results just barely hit the threshold for statistical significance, however. Data also didn't differentiate the drug from Ocaliva, a drug from Intercept Pharmaceuticals that works the same as EDP-305 but is likely to gain approval in NASH much sooner. Analysts are therefore unsure whether Enanta will be able to carve out a spot for itself in the market.
Intercept holds an enviable position in the race for the first NASH drug. Ocaliva (obeticholic acid) could gain approval in 2020, which would put it at least three years but potentially more than six years ahead of EDP-305, according to various analyst estimates.
Further complicating matters for Enanta are the Phase 2a data released Wednesday. The trial tested two doses of EDP-305 and found liver enzyme levels fell 28 units per liter in the higher-dose group compared to 15 units per liter in the placebo group.
The results were just over the threshold of statistical significance, and were in-line with the 28 units per liter reduction seen in clinical testing of Ocaliva.
More concerning for analysts, however, were the number of patients who experienced itching while on EDP-305. Over half of the higher-dose group did, and more than 20% dropped out of the study because of it. RBC Capital Markets analyst Brian Abrahams, who covers Enanta, noted how the placebo-adjusted itching rate for Ocaliva was 32% after 72 weeks with a 9% discontinuation rate.
There were some bright spots in the data for Enanta. Patients given the high dose of EDP-305 had a statistically significant reduction in liver fat as measured by a test known as MRI-PDFF. Abrahams wrote in a note to clients that this could help differentiate the drug from Ocaliva, which showed more "incremental changes" on the test.
Still, analysts generally agreed that the chances of EDP-305 being competitive with Ocaliva are debatable without better data.
"The bottom line for us is, EDP-305 looks exactly like OCA," except at a 10-times lower dose, wrote Raymond James analyst Steven Seedhouse in a note to Intercept investors. "The dose difference is irrelevant from a practical standpoint because the pharmacology (safety and pharmacodynamics) at the respective doses looks virtually identical."
Both Ocaliva and EDP-305 are FXR agonists, meaning they promote proteins known for regulating bile acid production and cholesterol levels. The class has been attractive not only for Intercept and Enanta, but pharma giants such as Novartis, Gilead and Novo Nordisk.
Enanta's data suggests its drug may have a leg up on the FXR competitors from Novartis and Gilead on a couple measures, including MRI-PDFF.
Yet the road to market is long, and Intercept looks as though it will have ample time with the market to itself.
"As we were thinking about this more, given the aggregate data ... it seems clear that FXR 'is what it is.' Seemingly nobody has been able to make a better mousetrap," Seedhouse wrote.
The Enanta data, he added, "suggest there is maybe no point in anyone else waiting for (or trying to make) a better one. [Intercept] is nearing registration (NDA filing any day now) and has a wholly owned FXR agonist that it looks like cannot be bested."
Enanta shares were down 18% by midday Thursday.